Fixed Deposit vs Recurring Deposit both are the investment products, particularly if you are looking for a free investment without risk. One of the main benefits of making an investment in a fixed deposit or recurring deposit is that there are constant returns over a specified era of time without involved.
Both fixed deposits and recurring deposits are offered by all the main banks and financial institutions. In both the schemes, you can invest an explicit amount and on the amount invested, you will obtain a fixed interest.
>> Fixed deposit investors require investing an amount once while in RD investors get the freedom of investing a fixed sum of amount on monthly basis.
>> Investors can put away their unused savings in an FD and earn a specific rate of interest, which is higher than the interest accrued when the money is sitting idle in the savings bank account. Recurring Deposits, on the other hand, permit one to inculcate a disciplined habit of saving a fixed sum of cash every month.
>> You can open a fixed deposit for the smallest amount duration of 7 days, whereas the maximum time of the deposit is about 10 years. On the other hand, the minimum period for the Recurring Deposit is six months, whereas the maximum deposit term is 12 months (10 years).
How RD (Recurring Deposit) is different from SB (Saving Bank) Account
Money grows after spending somewhere. Hence, it is very significant to know where to put your money, so that you could obtain more attention from the saving amount you have. India has top 3 options as a content put, a recurring deposit as well as saving account and these puzzles mostly folks. Most of the people are generally confused about Fixed Deposits and saving accounts as well as RD.
>> You must know that saving account is a must that all banks provide in India. The savings account offers you the ability to deposit and withdraw the money as per your desire. Savings accounts add interest on the deposit and are the safest way to nurture money along with the ease of withdrawal.
While the bank offers RDs where a fixed exacting amount is deposited monthly and the bank/financial organization pays attention to the deposited amount. It resembles FD except that in RD the amount is deposited on a period base and in FD the deposit is made when an account is going to open.
>> The interest rate in saving account is not much flat. It differentiates with the market whereas the velocity of interest in RD stay fix. Rate is preset and varies from 5.25% to 7.90% per year.
>> Tax benefits in saving account are not beneficial at any tax benefit for savings account while in Rd Income tax is not subtracted for interest gain up to INR 10,000.
In a savings account, there are no restrictions on the quantity of money which need to be deposited and the amount which can be upheld in the bank. Which means the account holder can deposit as much as they desire. But when it comes to being RD it is very less matching from both savings accounts and FDs, there a particular amount needs to be deposited on every month, and this amount is secure while opening the account.
Withdrawal is direct from a savings account and there is no border or restrictions of withdrawing. The account holder can withdraw as much as they fancy but in FDs and RDs they can’t do so, and the money can be introvert only when the tenor ends.
There is no need to take a loan that can be availed against the savings account and RD account but you mist know that sheltered loan can be availed against a Fixed Deposit. The picking of any of this account depends on the needs of the account holder and the choice to go with any of these should be taken only after understanding each and each aspect of each account.
Also See: RD Features and Benefits